AUSSIE SENATE COMMITTEE PROPOSES OVERHAUL OF CRYPTO TAXES, DAOS AND EXCHANGE LICENSES

Last updated: June 19, 2025, 20:11 | Written by: Katie Haun

The Australian cryptocurrency landscape is poised for a significant transformation, thanks to a recent proposal from the Senate Committee on Economics Legislation.This committee, providing feedback on Senator Andrew Bragg’s forward-thinking Digital Assets (Market Regulation) Bill 2025, has recommended a sweeping overhaul of the nation’s approach to digital assets.The proposed changes aim to foster innovation while providing a clearer regulatory framework for businesses and individuals operating in the burgeoning crypto space. The committee recommended more clarity for DAOs, new capital gains tax provisions, and tax breaks for green miners. The Senate Committee on Australia as a Technology and Financial Center (ATFC) has just tabled its third and final report in Parliament which has 12 far-reaching recommendations for the regulation of the digital asset and fintech industry down under.This isn’t just tinkering around the edges; it's a fundamental rethinking of how Australia treats crypto, Decentralized Autonomous Organizations (DAOs), and the exchanges that facilitate their trade. Notable recommendations include proposals for tax reform and a possible new corporate entity to be able to register decentralized autonomous organizations (DAOs) in Australia. TheThe goal? DAOs do not clearly fall within any of Australia's existing company structures this regulatory uncertainty is preventing the establishment of projects of significant scale in Australia. Asher Tan, CEO of Australian crypto exchange Coinjar, praised committee chair Senator Andrew Bragg and the team for the forward-thinking approachTo strike a balance between encouraging growth in the digital asset sector and protecting consumers from potential risks. Aussie Senate committee proposes overhaul of crypto taxes, DAOs and exchange licenses Octo By News Team The Senate Committee on Australia as a Technology and Financial Center (ATFC) has just tabled its third and final report in parliament, which has 12 far-reaching recommendations for the regulation of the digital asset and fintechBy introducing clarity on tax obligations, licensing requirements, and the legal status of DAOs, the Senate committee hopes to unlock the full potential of crypto in Australia, making it a more attractive destination for blockchain innovation. The Senate Committee on Australia as a Know-how and Monetary Heart (ATFC) has simply tabled its third and last report in Parliament which has 12 far-reachingThis move signals a proactive approach to regulating digital assets, distinguishing Australia as a potential leader in the global crypto economy.

Key Recommendations of the Senate Committee Report

The Senate Committee's report contains a number of far-reaching recommendations designed to modernize Australia's digital asset regulatory framework.The report addresses various issues.Here are some of the most noteworthy highlights:

New Licenses for Crypto Exchanges: Establishing a clear Australian regulatory and licensing framework for digital asset exchanges and providers. Australian s tax rules should be overhauled to be more friendly for the likes of bitcoin while digital currency exchanges could face tougher regulation including licensing, under recommendations handed down by parliamentary inquiry into the nation s nascent cryptocurrency industry.This includes the renewal of licenses for crypto exchanges.
Laws Governing Decentralized Autonomous Organizations (DAOs): Proposing a new corporate entity to allow DAOs to register in Australia, providing legal clarity and fostering innovation.
Overhaul of Capital Gains Tax (CGT) in Decentralized Finance (DeFi): Recommending an overhaul of capital gains tax on decentralised finance (DeFi) activities, ensuring the current CGT regime is fit-for-purpose for digital assets.
Tax Discount for Crypto Miners Using Renewable Energy: Offering tax breaks to crypto miners who utilize renewable energy sources, encouraging environmentally sustainable practices.

The Need for Regulatory Clarity: Addressing the DAO Dilemma

One of the most significant issues addressed by the committee is the regulatory uncertainty surrounding Decentralized Autonomous Organizations (DAOs). Aussie Senate committee proposes overhaul of crypto taxes, DAOs and exchange licensesCurrently, DAOs do not clearly fall within any of Australia's existing company structures. Aussie senate committee proposes overhaul of crypto taxes, DAOs and exchange licenses cointelegraph.com 14 more, UTCThis legal ambiguity prevents the establishment of large-scale projects within the country.The committee's recommendation to create a new corporate entity specifically for DAOs would resolve this issue.

Why is DAO Clarity Important?

The ambiguity around DAO legality creates several problems:

Discourages Investment: Investors are hesitant to put money into ventures with uncertain legal standing.
Hinders Innovation: Entrepreneurs are less likely to build innovative DAO-based projects in Australia when the regulatory environment is unclear.
Limits Growth: Existing DAOs may choose to incorporate in other jurisdictions with more favorable regulations.

By providing a clear legal framework for DAOs, Australia can attract investment, encourage innovation, and become a hub for DAO development.The proposed new corporate entity would allow DAOs to operate legally, enter into contracts, and participate fully in the Australian economy. The key takeaways from the Senate report include recommendations that propose an overhaul of capital gains tax on decentralised finance (DeFi) activities, new licences for crypto exchanges, new laws related to decentralised autonomous organisations (DAOs) and a tax discount for crypto miners using renewable energy.This certainty would unlock significant potential for DAO-based projects across various industries, from decentralized finance to supply chain management.

Reforming Capital Gains Tax (CGT) for DeFi Activities

The current capital gains tax regime in Australia wasn't designed with the complexities of Decentralized Finance (DeFi) in mind. The Committee broadly recommends pushing towards establishing a clear Australian regulatory and licensing framework for digital asset exchanges and providers, while ensuring that the current CGT and AML regimes are fit-for-purpose for digital assets and do not undermine innovation.DeFi activities, such as lending, borrowing, and yield farming, often involve intricate transactions that can trigger unintended tax consequences. The committee recommended more clarity for DAOs, new capital gains tax provisions and tax breaks for green miners. The Senate Committee on Australia as a Technology and Financial Center (ATFC) has just tabled its third and final report in parliament, which has 12 far-reaching recommendations for the regulation of the digital asset and fintech industry down under.The committee's recommendation to overhaul the CGT rules for DeFi is therefore crucial to avoid stifling innovation in this rapidly growing sector.

Challenges with Existing CGT Rules in DeFi

Several aspects of DeFi make it difficult to apply the existing CGT framework:

Lack of Clarity: The application of CGT to complex DeFi transactions is often unclear, leading to uncertainty and potential compliance issues.
Unintended Consequences: Certain DeFi activities, such as providing liquidity, can inadvertently trigger CGT events, even if the user doesn't realize a profit.
Complexity: Tracking and reporting CGT on DeFi transactions can be extremely complex and time-consuming, especially for users with limited tax expertise.

The proposed CGT overhaul aims to address these challenges by providing clearer guidance on how CGT applies to DeFi activities, preventing unintended tax consequences, and simplifying the reporting process.By creating a more favorable tax environment for DeFi, Australia can attract more investment and encourage the development of innovative DeFi projects within its borders.

Licensing Crypto Exchanges: Balancing Innovation and Consumer Protection

The Senate committee's recommendation for new licenses for crypto exchanges underscores the need for a robust regulatory framework that balances innovation with consumer protection. The committee recommends more clarity for DAOs, new capital gains, and tax breaks New proposal requires renewal of license for crypto exchanges More than 600,000 taxpayers have invested Aussie Senate Committee overhaul of crypto taxesRequiring crypto exchanges to obtain licenses ensures they meet certain standards of security, financial stability, and compliance with anti-money laundering (AML) regulations.

Benefits of Licensing Crypto Exchanges

Licensing crypto exchanges offers several key benefits:

Consumer Protection: Licensed exchanges are required to implement measures to protect customer funds and data, reducing the risk of fraud and theft.
Financial Stability: Licensing requirements can ensure that exchanges have sufficient capital reserves to withstand market downturns and avoid insolvency.
AML Compliance: Licensed exchanges are subject to strict AML regulations, helping to prevent the use of crypto for illicit activities.
Increased Trust: Licensing can enhance the credibility and trustworthiness of crypto exchanges, attracting more users and investment.

The committee’s proposal requires renewal of licenses for crypto exchanges. Posted by u/Party-Height-6830 - 4 votes and 4 commentsThis ensures exchanges stay compliant with up-to-date regulations. Australia's Senate Committee on Economics Legislation has provided feedback on Senator Andrew Bragg's cryptocurrency bill, The Digital Assets (Market Regulation) Bill 2025. The committee's report, released on September 4, proposes several amendments to the bill.By implementing a comprehensive licensing regime, Australia can create a safer and more trustworthy environment for crypto trading, attracting more users and investment while minimizing the risks associated with this nascent technology.

Incentivizing Green Crypto Mining: Tax Breaks for Renewable Energy Use

The energy-intensive nature of crypto mining has raised concerns about its environmental impact. It proposes new licenses for crypto exchanges, new laws to govern decentralized autonomous organizations (DAOs), an overhaul of capital gains tax in decentralized finance (DeFi) and aThe Senate committee's recommendation to offer tax discounts for crypto miners using renewable energy is a welcome step towards promoting more sustainable practices in the industry. Skip to main content Bitcoin Insider. MenuThis incentivizes miners to switch to cleaner energy sources, reducing the carbon footprint of crypto mining in Australia.

Why Incentivize Renewable Energy Use in Crypto Mining?

Incentivizing green crypto mining offers several benefits:

Reduces Carbon Emissions: Encouraging miners to use renewable energy significantly reduces the carbon emissions associated with crypto mining.
Promotes Sustainability: Green crypto mining aligns with Australia's broader sustainability goals and helps to create a more environmentally friendly crypto industry.
Attracts Investment: Environmentally conscious investors are more likely to invest in crypto projects that prioritize sustainability.
Enhances Reputation: Australia can enhance its reputation as a leader in sustainable crypto innovation by incentivizing green mining practices.

By offering tax breaks for renewable energy use, Australia can incentivize miners to adopt cleaner energy sources, reducing the environmental impact of crypto mining and promoting a more sustainable crypto industry. It proposes new licenses for crypto exchanges, new laws to govern decentralized autonomous organizations (DAO), an overhaul of capital gains tax in decentralized finance (DeFi) and a tax discount for crypto miners using renewable energy.This approach aligns with the growing global focus on environmental sustainability and positions Australia as a responsible player in the crypto space.

Senator Andrew Bragg's Vision and the Digital Assets (Market Regulation) Bill 2025

Senator Andrew Bragg's Digital Assets (Market Regulation) Bill 2025 is the centerpiece of this proposed regulatory overhaul.His vision is to create a clear and comprehensive legal framework that fosters innovation in the digital asset sector while protecting consumers.The Senate committee's feedback on the bill is an important step towards achieving this goal.

Key Aspects of the Digital Assets (Market Regulation) Bill 2025

The bill addresses several key areas of concern in the digital asset space:

Licensing of Crypto Exchanges: Establishing a licensing regime for crypto exchanges to ensure they meet certain standards of security and compliance.
Regulation of Stablecoins: Providing a regulatory framework for stablecoins to ensure their stability and protect consumers.
Governance of DAOs: Clarifying the legal status of DAOs and providing a framework for their operation.
Taxation of Digital Assets: Updating the tax laws to address the unique characteristics of digital assets and provide clarity for taxpayers.

The bill aims to strike a balance between fostering innovation and protecting consumers. Aussie senate committee proposes overhaul of crypto taxes, DAOs and exchange licenses PANews ｜ 0:58 The committee recommended more clarity for DAOs, new capital gains tax provisions, and tax breaks for green miners.By providing a clear and comprehensive regulatory framework, it seeks to create a more stable and predictable environment for businesses and individuals operating in the digital asset sector.

Impact on Australian Cryptocurrency Investors

The Senate committee's recommendations will have a significant impact on Australian cryptocurrency investors.The proposed changes to CGT rules for DeFi activities, for example, could simplify tax compliance and reduce the risk of unintended tax consequences.The licensing of crypto exchanges would also enhance investor protection by ensuring that exchanges meet certain standards of security and financial stability.More than 600,000 taxpayers have invested in cryptocurrency.

Potential Benefits for Crypto Investors

The proposed changes offer several potential benefits for crypto investors:

Simplified Tax Compliance: Clearer CGT rules for DeFi activities would make it easier for investors to comply with their tax obligations.
Enhanced Investor Protection: Licensing of crypto exchanges would reduce the risk of fraud and theft, protecting investor funds.
Increased Confidence: A more stable and predictable regulatory environment would increase investor confidence in the crypto market.

However, it's important to note that the proposed changes could also have some negative consequences for investors. The committee recommended more clarity for DAOs, new capital gains tax provisions, and tax breaks for green miners. Post navigation Aussie cyber spies to control critical infrastructure during ransomware attacksFor example, the increased regulatory burden on crypto exchanges could lead to higher fees or reduced services.Investors should carefully consider the potential risks and benefits of the proposed changes before making any investment decisions.

Asher Tan's Perspective: A Forward-Thinking Approach

Asher Tan, CEO of Australian crypto exchange Coinjar, praised committee chair Senator Andrew Bragg and the team for their forward-thinking approach.Tan sees the proposed regulatory changes as a positive step towards fostering innovation and creating a more stable and predictable environment for the crypto industry.This positive sentiment from industry leaders suggests the proposals are well-received and seen as beneficial for the growth of the sector.

The Future of Crypto Regulation in Australia

The Senate committee's report represents a significant step forward in the development of crypto regulation in Australia.The proposed changes aim to create a more balanced and comprehensive regulatory framework that fosters innovation while protecting consumers.By addressing key issues such as DAO governance, DeFi taxation, and exchange licensing, the committee is laying the foundation for a thriving and sustainable crypto industry in Australia.

Challenges and Opportunities Ahead

While the proposed changes are promising, there are still some challenges to overcome.The government needs to carefully consider the feedback from industry stakeholders and ensure that the final regulations are practical and effective.The regulations should be flexible enough to adapt to the rapidly evolving nature of the crypto industry.

However, the opportunities are significant.By embracing innovation and providing a clear regulatory framework, Australia can become a leader in the global crypto economy.This will attract investment, create jobs, and boost the economy.The recommendations by the Senate Committee on Australia as a Technology and Financial Center (ATFC) have 12 far-reaching recommendations for the regulation of the digital asset and fintech industry down under.

Frequently Asked Questions (FAQs)

What are the key recommendations of the Aussie Senate committee on crypto?

The key recommendations include new licenses for crypto exchanges, new laws governing DAOs, an overhaul of capital gains tax in DeFi, and a tax discount for crypto miners using renewable energy.

Why does Australia need new laws for DAOs?

Currently, DAOs don't fit into existing company structures, creating legal uncertainty.New laws would clarify their legal status, encouraging investment and innovation.

How will the proposed changes impact crypto investors in Australia?

The changes could simplify tax compliance for DeFi activities, enhance investor protection through exchange licensing, and increase confidence in the crypto market.

What are the benefits of offering tax breaks for green crypto mining?

Tax breaks incentivize miners to use renewable energy, reducing carbon emissions and promoting a more sustainable crypto industry.

When will these proposed changes take effect?

The timeline for implementation depends on the government's response to the Senate committee's report and the legislative process.

Conclusion: Australia's Path to Crypto Leadership

The Aussie Senate committee's proposal to overhaul crypto taxes, DAOs, and exchange licenses marks a pivotal moment for the country's digital asset landscape.By addressing critical issues such as regulatory uncertainty surrounding DAOs, complex taxation of DeFi activities, and the need for robust exchange licensing, Australia is taking proactive steps to foster innovation and attract investment in the crypto space.The recommendations, including tax breaks for green miners, demonstrate a commitment to sustainable practices and responsible growth.This comprehensive approach positions Australia as a potential leader in the global crypto economy, one that balances innovation with consumer protection and environmental responsibility.While challenges remain in implementing these changes effectively, the potential benefits for investors, businesses, and the economy as a whole are significant.Keep an eye on how the Digital Assets (Market Regulation) Bill 2025 progresses, as its outcome will shape the future of crypto in Australia.The key takeaways?Expect clearer regulations, a more level playing field, and a brighter future for digital assets down under.